Houthis Use UN-Funded Oil Tanker To Store & Sell Fuel, Defying Sanctions

A massive oil tanker bought by the United Nations for $55 million to prevent an environmental disaster is now being used by the Houthis in Yemen to store and transfer Russian oil.

The vessel, VLCC Yemen, was originally purchased in 2023 to offload oil from the decaying FSO Safer, but is now reportedly under effective Houthi control.

The UN Development Programme (UNDP) led the operation, raising over $130 million from countries including the Netherlands, Germany, the US, Saudi Arabia, private companies, and even individual donors, to prevent a massive oil spill off Yemen’s coast.

The money was used to purchase the VLCC Yemen (previously named Nautica) from tanker giant Euronav and transfer 1.1 million barrels of oil from the Safer.

The FSO Safer, an aging 49-year-old floating storage unit anchored off Ras Isa, had been left unattended since the Houthis took over the surrounding area and Hodeidah port in 2015.

The Safer Exploration and Production Operations Company (SEPOC), a national oil firm jointly claimed by both Yemen’s official government and the Houthis, had to stop operations, leaving over 1.14 million barrels of oil on board the deteriorating ship.

This oil came from Yemen’s Marib oilfield and was valued at nearly $80 million. Without maintenance, the ship became a serious environmental and safety risk.

In August 2023, the UN successfully transferred the oil from the Safer to VLCC Yemen. However, there was no agreement on what would happen next. The FSO Safer remains in place and unsalvaged.

The ownership of the VLCC Yemen was handed over to SEPOC, but the UNDP continued to pay for its operation and crew, at a cost of $450,000 per month for technical services, crew salaries, provisions, insurance, and oversight.

Since the transfer, the vessel has been used to store Russian-origin petroleum products, with at least three ship-to-ship (STS) transfers tracked by Lloyd’s List. These transfers took place in open waters and involved mostly gasoil, a refined petroleum product. Some of this fuel was later delivered to Ras Isa, which is under Houthi control.

On June 8, the coastal tanker Seastar-1 was spotted transferring oil from VLCC Yemen and later unloading it in Ras Isa. Before this, the VLCC Yemen had also taken on board Russian petroleum via ship-to-ship operations. It was noted that locals are still capable of “cooking” crude oil into low-quality fuel, which is then sold in local markets despite lacking proper refining.

The UNDP, which still plays an advisory role, said in a statement that SEPOC arranged the fuel transfers. The agency said it had strongly objected to these actions each time, verbally and in writing, but has no control over the ships involved or knowledge of where the oil came from or was sent.

The VLCC Yemen is now being used as a floating oil storage unit for the Houthis, who are under international sanctions from the UN, US, EU, and UK. These sanctions are linked to activities like weapons smuggling and dual-use technology transfers.

Since the Israel-Gaza war began in October 2023, the Houthis have launched over 100 attacks on commercial ships in the Red Sea using ballistic and cruise missiles and drones.

Israel has responded with airstrikes targeting Houthi-controlled ports like Hodeidah, Ras Isa, and As-Salif, aiming to damage their fuel-importing capabilities. These strikes have hit oil terminals, power stations, and even vessels like the Galaxy Leader, a commercial ship hijacked by the Houthis in November 2023.

The Israeli military said that the Houthis installed a maritime radar system on the Galaxy Leader to help them target other ships.

The VLCC Yemen, still anchored near Ras Isa, continues to be maintained using UN funds, even though it is now essentially under Houthi use. The ship’s UN-funded crew has been involved in the oil transfer process, possibly under pressure from local Houthi authorities.

According to Lloyd’s List, experts like Ian Ralby, who previously warned of the dangers of the FSO Safer, believe the whole operation was poorly planned. Ralby said the world was asked to fundraise to remove oil from a dangerous ship, but the result ended up benefiting the Houthis.

He added that even children in the U.S. held bake sales to raise money, which ultimately helped provide the Houthis with a valuable oil storage asset, something they are now using to get around international restrictions and work more closely with countries like Russia and Iran.

The plan to tow VLCC Yemen away after the oil transfer was also suspended because of rising security risks after the Houthis escalated attacks on shipping in the Bab el-Mandeb Strait.

Reference: haaretz

Source: Maritime Shipping News